Stocks mixed on positive U.S. jobless claims data

North American markets were mixed Thursday as traders appeared to shrug of a rosier-than-expected report on jobless claims in the United States.

The S&P/TSX composite index was down 13.59 points to 12,571.46 due to a weakening gold prices but balanced with a surge in share price for retailer Canadian Tire, which said it planned to unlock the value of its property holdings by creating a REIT.

The Canadian dollar was unchanged at 99.67 cents US.

The U.S. Department of Labor said unemployment claims dropped by 4,000 last week to a seasonally adjusted 323,000, indicating that layoffs have returned to pre-recession levels and may lead to more hiring. Economists had expected a slight uptick to 358,000.

The department said the four-week average dropped 6,250 to 336,750 — the lowest it’s been since November 2007, one month before the recession began.

Despite the positive news, there was little reaction on Wall Street. The Dow Jones industrials was down 12.72 points to 15,092.40 after it closed above 15,000 for the first time earlier this week.

The U.S. also reported that stockpiles held by wholesalers rose 0.4 per cent in March compared with February, when they had fallen 0.3 per cent. Wholesale sales in March dropped 1.6 per cent, the biggest setback since March 2009, when the U.S. was in recession. Sales had risen 1.5 per cent in February.

Inventory rebuilding can be a positive for economic growth because it means stronger production at the nation’s factories. The March increase left inventories at US$503.1 billion, up 4.7 per cent from a year ago and 30.7 per cent above the recession low.

The latest retail figures also showed that U.S. shoppers have picked up their spending in April from March despite cold weather that stopped them from buying spring clothes.

According to a preliminary tally of 11 retailers by the International Council of Shopping Centers, revenue at stores open at least a year rose 3.4 per cent in April from last year. That’s up from a 2.2 per cent gain in March but still shows modest growth.

The markets have been buoyed in recent days by a number of factors, including signs that the U.S. economic recovery is gaining momentum and that Europe’s debt crisis may be easing. But with the U.S. markets now in negative territory, it may be a signal that investors are planning on taking a breather from the record-high levels seen this week.

Commodities were also retreating from Wednesday’s settlement prices when oil, gold and copper all closed at prices not seen in more than a month. It has been a roller-coaster ride recently for commodity prices, which were down earlier in the week.

The June crude contract on the New York Mercantile Exchange declined 63 cents to US$95.99 a barrel.

June gold bullion dropped $8.80 to US$1,464.90 an ounce, after have closed up nearly $25 on Wednesday, while July copper was down four cents to US$3.33 a pound.

In corporate news, Canadian Tire Corp. Ltd. (TSX:CTC.A) says it’s planning on creating a $3.5-billion real estate investment trust, with an initial public offering later this year. The announcement came as the iconic retailer announced a 2.9 per cent increase in first-quarter earnings amid a 1.7 per cent increase in total revenue to $2.48 billion from $2.44 billion in the same 2012 quarter. Canadian Tire stock was up nearly 14 per cent, or $10.33, to $84.37.

BCE Inc. (TSX:BCE) reported a 6.6 per cent increase in net earnings in the first quarter, although revenue remained almost unchanged year over year. Canada’s largest communications company says net earnings attributable to common shareholders were $566 million or 73 cents per share, up from $531 million or 69 cents in the same 2012 period. Revenue rose only slightly, to $4.34 billion from $4.33 billion. Shares in BCE fell slightly by 0.17 per cent, or eight cents, to $47.84.

Meanwhile, Bombardier Inc. (TSX:BBD.B) saw a four per cent uptick in its shares to $4.40 after it reported a 25 per cent increase in revenue in the first quarter to US$4.3 billion and said its new CSeries airliner remains on schedule. The Montreal-based plane and train builder says net income was down eight cents per share at US$148 million, but up eight cents on an adjusted basis at US$156 million.

Overnight, world markets declined after higher than expected inflation figures were released from China and investors cashed in on some recent gains.

Government figures showed China’s consumer price index rose 2.4 per cent in the year to April, up from 2.1 per cent the previous month and ahead of expectations of a more modest advance of 2.2 per cent.

In Europe, Germany’s DAX, which has set a string of record highs, was down 0.2 per cent at 8,238. The CAC-40 in France was 1.1 per cent lower at 3,915 while the FTSE 100 index of leading British shares fell 0.1 per cent to 6,578 ahead of the monthly Bank of England policy decision. No changes in interest rates or stimulus programs were expected.

Earlier, Japan’s Nikkei 225 index dropped 0.7 per cent to 14,191.48 — a modest retreat after a strong run that has seen the Nikkei hit five-year highs.

Active Investor was produced by Postmedia's advertising department in collaboration with iShares by BlackRock to promote awareness of this topic for commercial purposes. Postmedia's editorial departments had no involvement in the creation of this content.

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